HP and the Business of 3D Printers: Will it be Better, Faster, and Simpler?

Second fiscal quarter saw the rise of Hewlett-Packard’s net income by 18% breaking a long streak of abysmal performance. However, this is a temporary respite and it’s going to take significant effort and market strategy for one of the world’s most prominent PC makers to recuperate. The task at hand is to turnaround the company performance in a sustainable manner. The poor performance of the company in the recent past can be attributed to, among other things, bad global economy, dismal market conditions, and confusing management moves. Moreover, the sales of two of its key business units- enterprise computing and printing plummeted significantly, further adding to the company’s woes. With the demand in the PC industry expected to decline further, the company needed to diversify its interests and penetrate into emerging markets.

For a technology company such as HP, the two key emerging markets to venture into are wearable technology (expected to grow over $94 billion by 2024 at a CAGR of 39%) and 3D printing market (expected to grow over $ 10 billion by 2022 at a CAGR of20%). Earlier in March 2014, HP’s CEO, Meg Whitman said the company plans to enter the 3D printing market by the end of fiscal year 2014. Whitman, who described the technology “like watching ice melt,” said the company had solved two of the biggest problems with 3D printing: speed and surface quality. Whitman claimed that HP sees the 3D industry as an exciting business opportunity and aims to become a leader in the market.

Why not Wearable?

HP is already late in foraying into the wearable market, with major technology companies having already launched the early version of their wearable products. Moreover, the wearable market has become intensely competitive with the launch of new players and products becoming a recurring affair.

3D Printing Market- A natural trajectory?

The competitive landscape of 3D printing and HP’s dominance in 2D printing market make it quite conducive for the company to emerge as a prominent player in the industry. Thanks to its established brand and network, HP’s entry into 3D printing will add some momentum to an up-and-coming industry dominated by smaller players like Stratasys and 3D Systems. Moreover, HP’s entry will reinforce innovation in the industry as HP can effortlessly fund any R&D to improve the technology. Moreover, it has the potential to manufacture 3D printers cheaply and exploit its well established distribution channel to market them easily. In an interview, Whitman made it clear that her intentions are only to enter the market for business based 3D printing, and not consumer based printers. However, we are of the opinion that HP will subsequently venture into consumer 3D printing market to leverage its huge brand recognition in the consumer electronics industry.